With surging property prices and rents, housing benefit is filling the financial gap to keep people in their homes. Here’s everything you need to know about it.
For many, Housing benefit and universal credit are vital to stave off homelessness and keep a roof above their head. Image: Iryna Tysiak / Unsplash
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Housing benefit is vital to keeping people in their homes and out of homelessness.
Where incomes are not enough to cover the cost of keeping a home, housing benefits like local housing allowance or money paid through universal credit ensures people have enough money to keep a home above their head.
The housing crisis means the housing benefit bill for the government is a large one.
There are more than one million people on waiting lists for social housing across England, government figures show, and while the wait for an affordable home continues, the private renting sector is often the only option. With the average private rent cost rising by 8.4% per cent in the year up to September 2024, according to the Office for National Statistics (ONS).
Social security support is a lifeline for thousands who’d struggle to cover housing costs otherwise. Here’s everything you need to know.
Who can claim housing benefit?
Housing benefit is paid by local authorities and available to help pay rent if you’re on a low income, unemployed or claiming benefits. But it’s being replaced by universal credit and most people will have to claim that instead.
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You can claim housing benefit if you or your partner is state pension age.
You can also claim if you are in supported, sheltered or temporary housing. That includes B&Bs arranged by the council if you’re homeless or a hostel or a domestic abuse refuge.
Whether you can rent from a family member – including parents, children and siblings – and can claim housing benefit depends on whether you live in the same property or not. If you both live under the same roof then you will not be able to claim housing benefit. If you do not live in the same property, and you fit all the other necessary criteria. then you may be able to claim housing benefit.
How to claim housing benefit
There are two ways to claim housing benefit. The first is through your local council – find out how to contact them here.
The second way is through a pension credit claim if you’re eligible. You can apply online here or via post or phone up to four months before you are due to receive your pension.
You will need to provide evidence of your income, how much rent you pay and your tenancy as well as ID, recent payslips and bank statements.
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Can you claim housing benefit and universal credit?
The housing element of universal credit has replaced housing benefit for working-age people. You are able to continue claiming housing benefit until you have a change of circumstances, such as getting a new job, being forced out of work due to sickness or a change of family circumstances. That change will trigger a migration on to universal credit.
If you’re already receiving universal credit without the housing element, and your circumstances change to mean you’re struggling to cover rent, you can still apply for those costs to be covered through universal credit.
Most people can’t claim housing benefit and universal credit at the same time, though there are some exceptions – primarily people in supported or temporary housing.
Does universal credit pay your full rent?
It depends on how many people live in your home and how many spare bedrooms you have.
For people who rent their property from a local council or housing association, you will receive full rent through universal credit. However this can be reduced if the property has spare bedrooms. If you have one spare bedroom then your universal credit payment will be reduced by 14% and that increases to 25% if there are two or more spare bedrooms in your property.
As for private renting, the number of people living in your home determines how much help you receive through universal credit to deal with housing costs and it’s likely that it won’t cover your full rent.
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Local Housing Allowance (LHA) is used to work this out for your area. In April 2024, LHA was increased in line with the 30th percentile of market rents in September 2023 – meaning it should cover the cheapest 30% of local rents according to prices at that time.
The rate was frozen for four years prior, driving hardship and pushing people further into poverty. But the Labour government has now decided to freeze the LHA rate again, meaning it won’t rise until at least 2026.
That’s despite average rents continuing to increase since September last year – by £174 per month in London, according to the ONS, and by £92 per month across Britain as a whole.
If you have spare bedrooms not being used by people in your property you will receive housing costs to cover a smaller property unless you need an extra bedroom for specific reasons. You might receive regular overnight care, for example, or someone in your household might be unable to share a room due to disability.
Under home overcrowding regulations, it’s expected that an adult couple would share a bedroom, as would two children of the same sex or two children under 10 regardless of sex.
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How much housing benefit can I get?
The portion of your rent that will be covered by housing benefit depends on a few factors – primarily where you live, what type of housing you live in, who you live with, and how much money you have in income and in savings. It’s a means tested benefit, so you won’t know exactly how much will be covered until you apply.
The maximum housing benefit that you can get is the full cost of your rent, but there are no guarantees that you’ll be given that amount.
If you live in council or social housing, it’s likely you’ll receive your full rent amount in housing benefit. But if you’re renting from a private landlord, your housing benefit will only be as much as your area’s LHA, and if your rent is more expensive then you’ll be expected to cover the rest yourself. Your local council might have discretionary housing payments available to make up the difference.
It depends on how many people are in your household too. If you’re a single person person under 35, you’ll likely only receive enough to cover a bedsit or room in a shared home.
But the limit won’t apply in other circumstances, such as for disabled people.
Yes, you do still have to pay council tax if you receive universal credit.
Universal credit doesn’t include any help to pay council tax, but remember you should be eligible for a 25% council tax discount if you live on your own. Discounts are also available if you are or live with a student or you’re a carer.
If you are struggling to pay council tax, you may be able to receive a Council Tax Reduction – also known as Local Council Tax Support. Contact your council to see if you are eligible.
Does the benefit cap include housing benefit?
The benefit cap – which puts an upper limit on how much people can receive in benefits, regardless of need – does include housing benefit, both the payments of that name and the housing element of universal credit.
The cap means that even those entitled to housing benefit are often locked out of the support they need to pay rent.
Around 123,000 people had their benefits capped by the end of May 2024, a 61% rise since February. It means households are an average £256 per month worse off.
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“With homelessness already at record levels, it’s deeply concerning to see such a staggering rise in the number of households having their benefits capped,” said Matt Downie, chief executive of homelessness charity Crisis. “Behind these figures are struggling parents who will be spending anxious nights worrying about how they will put food on the table or keep a roof over their children’s heads.
“Through our services we see the hardship brought on by rising living costs and unaffordable rents which is pushing more and more people to the brink. While the amount low-income households receive to help pay their rent rose earlier this year, we know for thousands this vital support will have been completely wiped out by the impact of the cap. We cannot build a stable nation if we’re giving with one hand and taking with another.”
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